STANLEY GARTENSTEIN, JUDICIAL HEARING OFFICER:

The contestants in this fee dispute are the Leonard Finz Law Firm and Ronald R. Benjamin, Esq., successive attorneys for plaintiff. Both have consistently been in the forefront of DES litigation. They have both played a significant role in defining the law in a complex newly emerging area.

The issue now before the Court requires apportionment of attorneys fees generated by a $500,000 settlement of that portion of this action brought on behalf of the lead plaintiff Caren Glickson against Eli Lilly & Co., one of a number of defendants all of whom are pharmaceutical manufacturers or distributors. The respective involvement of and consequent liability of each of these defendants with reference to plaintiff's injuries emerged, of necessity, during the progress of this complex litigation. Additionally, a significant legal development in the form of the Court of Appeals decision in Hymowitz v Eli Lilly & Co., 73 NY2d 487, occurred during the pendency of the underlying action. This decision, in effect, recognized the "market share" theory of liability and apportionment thereof in New York. In a significant benefit conferred upon plaintiffs in DES litigation, it held that liability for DES-related injuries is to be apportioned in a manner corresponding to the overall pro rata culpability of each individual defendant, same to be measured by the amount of risk of injury that defendant created to the public-at-large by participating in the national marketing and distribution of this drug. This holding effectively changed the ground rules in midstream for literally thousands of pending cases.

By prior order herein, each of these attorneys has been deemed a petitioner (and respondent where appropriate) and this dispute between them deemed to be cross-petitions to assert attorneys liens as required by the Judiciary Law.

BACKGROUND

Based upon discovery that the drug known as DES ingested in utero by pregnant women primarily in the decades of the 50's and 60's affected their after-born daughters by causing conditions ranging from cancer to T-shaped uterus, and infertility, the Legislature enacted Chapter 682, Section 4 of the Laws of 1986. This statute revived for a limited window of time ending in 1987 all causes of action for injuries caused by DES which had otherwise expired because of the Statute of Limitations. As a result, some 800 actions (cf., Hymowitz v Eli Lilly & Co., 73 NY2d 487) were filed throughout the State in addition to all actions already commenced in which the statutory period of limitations had not expired. To facilitate the movement of this flood of litigation through the system, ad hoc committees representing groups of plaintiffs and defendants were formed for the purpose of regulating housekeeping matters such as calendar control, discovery, etc. Rulings by various trial and appellate courts impacting on issues in common became effective in other geographic areas by consensus or by collateral estoppel concerning specific issues decided in otherwise unrelated litigation. (Cf., Kaufman v Eli Lilly & Co., 65 NY2d 449.)

The underlying action herein was originally brought on behalf of Caren Glickson, the lead plaintiff. Mrs. Glickson is in turn the daughter of Elizabeth Schorr, who ingested DES while pregnant. Both mother and daughter were party plaintiffs in their own right. Caren Glickson's husband, also a plaintiff, sued for loss of her services. The action of the prime plaintiff Caren Glickson only as against Eli Lilly & Co. was ultimately settled for $500,000. There were other settlements by other plaintiffs against other defendants which are irrelevant to this proceeding. By prior order herein, the proceeds of Mrs. Glickson's settlement with Eli Lilly & Co. over and above that amount segregated out pursuant to the fee provisions of counsel's retainer agreement were paid to plaintiff Caren Glickson. Defendant Eli Lilly & Co. now holds an escrow fund out of which all attorneys fees will be paid. The apportionment of this fund between the offices of the Finz Law Firm and that of Ronald R. Benjamin, Esq. is now at issue.

In 1993, plaintiff Caren Glickson discharged the Finz Law Firm and retained Mr. Benjamin, who ultimately settled the action. Upon settlement, the Finz Law Firm asserted a lien on the proceeds for a percentage of the contingent fee, a claim which ultimately reached the Appellate Division. The Second Department held (234 AD2d 416) that the Finz Law Firm was entitled not to an apportionment of the contingent fee, but to a fee based upon the fixed dollar value of its services on an hourly basis. As a result, the Finz Law Firm submitted a bill in the amount of $76,969.25 listing 181 items and 372 hours of work. Much of this bill was challenged by Mr. Benjamin, who sought a ruling in limine disallowing certain items and prohibiting evidence of them at the trial of his objections. This motion was adjudicated by the Hon. Steven W. Fisher, Administrative Judge of Queens County, who issued his decision defining the scope of this trial on July 26, 1999. In an accompanying order, the undersigned was designated to conduct the trial.

In his decision, Justice Fisher held that services of the Finz Law Firm may be compensable "only if performed or expended pursuant to a retainer agreement with the plaintiff Caren E. Glickson." Further, " . . . any service performed . . . on behalf of any other plaintiff, or against any other defendant, is not compensable." Finally, Justice Fisher held that any service performed for plaintiffs jointly or against other defendants jointly was compensable only on a pro rata basis to the extent same benefitted plaintiff Caren Glickson, the corpus of whose settlement generated the escrow fund now before the undersigned for distribution.

The factual issues herein, involving as they do, the performance of legal services and the appropriateness of these services, place the Court in a position of evaluating each service performed by the Finz Law Firm through hindsight. In doing so, reference is necessary to legal developments in the general area of DES litigation in order to set up a measure against which services of the Finz Law Firm may appropriately be measured. The very nature of this proceeding requires, in effect, that the Court second guess counsel's judgment with reference to the necessity for performance of each of such claimed services as well as their ultimate beneficial effect or lack of them on Caren Glickson's case. Decision has been reserved on three issues, each generated by an objection to the introduction of evidence concerning that particular issue. The Court is constrained to point out in the clearest possible manner that all possible scenarios which may be presented during the balance of this trial will necessarily be determined by reference to the rulings herein.

ISSUES

1. In the course of the underlying litigation, the defendant pharmaceutical companies served a demand for execution of an authorization to examine the medical records of Elizabeth Schorr, the mother of plaintiff Caren Glickson, who had ingested DES. Faced with full disclosure of her medical history, Mrs. Schorr declined to execute the authorization. Responding to this refusal by their client, the Finz Law Firm attempted to change her status (and concomitant discovery obligations under CPLR Article 31) from party to nonparty witness, prepared and solicited execution of a consent discontinuance of her case. Opposing counsel refused to so stipulate. In response to this refusal, a motion was brought on behalf of Mrs. Schorr for leave to discontinue her action. This motion was granted in due course. The moving papers in connection with this motion have been offered in evidence to support the Finz Law Firm's claim for the value of its services in drawing and prosecuting it. Objection has been entered and is sustained on the following legal and historic basis.

During the course of DES litigation then pending in the Supreme Court of New York County, 400 cases with common issues whose pre-trial progress were under the supervision of the Hon. Ira Gammerman became the subject of a critical ruling by him with regard to the scope of discovery proceedings therein. This ruling was reviewed by the Appellate Division, First Department on appeal. (In the Matter of New York County DES Litigation, 168 AD2d 44.) At issue were authorizations sought by defendant pharmaceutical companies to obtain copies of the hospital and medical records of plaintiff mothers, fathers and other family members on the urged basis that these records were necessary to show that claimed injuries were not proximately caused by in utero exposure to DES but were instead attributable to genetic or hereditary origin. The mother-plaintiffs opposed disclosure of these records claiming that they fell within the scope of the physician-patient privilege. (CPLR 4504.) The IAS Court held, in effect, that a waiver of this privilege by virtue of disclosure of confidential information by the particular family member to each daughter-plaintiff therein had occurred because such information "must have" been furnished from one family member to another. The Appellate Division, First Department, reversed holding that Article 31's scheme which created significantly greater obligations in discovery for parties as opposed to nonparty witnesses had to be carried over into pending DES litigation; that the privacy interests of nonparty relations deserved protection to the extent that hospital and medical records of nonparty family members could be discoverable only where it was positively demonstrated that the daughter-plaintiff had actually provided such information about the particular family member to her physician for purpose of treatment and then only to the period limited to the ingesting mother's medical history during the period of gestation.

There is, accordingly, in the light of this holding by the First Department, no possible theory to support an award for counsel fees for services of the Finz Law Firm in bringing on the motion in question. Even if it can be established that these particular services benefitted any plaintiff at all, this benefit did not contribute in any degree to plaintiff Caren Glickson's recovery.

2. During the pendency of this underlying action, the statute reviving plaintiffs' cause of action notwithstanding expiration of the previous period of limitations (cf., Chapter 682, Section 4, Laws of 1986) was challenged in an unrelated case as unconstitutional. This constitutional attack ultimately failed. (Hymowitz v Eli Lilly & Co., supra.) As it made its way up to the Court of Appeals, motions by numerous pharmaceutical defendants in DES cases pending throughout the state were brought on seeking a stay of all those actions pending its resolution. This motion was indeed made in this case. It was successfully defended by the Finz Law Firm. The papers in opposition drawn by the Finz Law Firm have been offered in evidence under objection. This objection is overruled. To the extent that these successful efforts of the Finz Law Firm positively impacted specifically upon Caren Glickson's case, this exhibit will be considered on a pro-rated basis and only to the extent that it may be demonstrated that these papers were unique to this case and not utilized in other unrelated DES litigation in which said law firm may have been compensated under their contingent fee arrangement by virtue of any recovery therein.

3. It has been indicated that the complaint herein and complex interrogatories prepared and served by the Finz Law Firm will be offered in evidence. In response, Mr. Benjamin has subpoenaed records of the Finz Law Firm to be offered by Mr. Benjamin to support his argument that service of these documents in this particular litigation involved nothing more than "a trip to the word processor," based on the reality that these documents had already become boiler plate by the time they were utilized in this litigation, one of the last DES cases prosecuted by the Finz Law Firm. Inasmuch as the order of Justice Fisher required a showing that any services claimed by the Finz Law Firm were rendered solely on behalf of Caren Glickson and solely against Eli Lilly & Co., any objection to the introduction of these records would necessarily have to be overruled. As a corollary to the foregoing, any failure to produce these subpoenaed records would have to result either in a negative inference or other punitive action. Of special importance to our deliberations on this issue is the decision of the Court of Appeals in Kaufman v Eli Lilly & Co., 65 NY2d 449 in which it was held that members of the pharmaceutical industry who were defendants in any action tried to conclusion were collaterally estopped from challenging findings made either by the court or by juries in early DES cases during subsequent litigation. This decision effectively impaired virtually all opposition to imposition of liability in literally thousands of ensuing cases. The burden of the Finz Law Firm to establish that any particular claimed service was rendered solely on behalf of Caren Glickson becomes correspondingly more difficult. The Court has carefully set forth its reasoning on the issues discussed herein. It cannot conceive of any future issue which may arise herein which would not be controlled by these rulings. There is no item among the 281 listed on the Finz bill for services which cannot be validated or otherwise disposed of by reference to these rulings. The contestants, both attorneys of note, cannot be unmindful that amicable settlement of this dispute will significantly inure in a positive manner to the public's perception of our profession. In this spirit, they are respectfully urged to renew their efforts to compromise these issues. They have been furnished herein with the most comprehensive guidelines possible to enable them to do so amicably. The Court again stands ready to participate in any further discussions or negotiations focused upon amicable disposition.

Dated: October 28, 1999 ______________________________

STANLEY GARTENSTEIN

Judicial Hearing Officer